Legality of opera shutdown questioned

In a last-ditch attempt to save the San Diego Opera, a group of board members is expected to unveil a proposal Thursday designed to let the company go forward by cutting office expenses and salaries, broadening the mix of musical styles and shifting performances into cheaper and less conventional venues away from the group's long-time home in the Civic Center.

Opera president Karen Cohn — one of the driving forces behind moves to close the opera— has suggested that before such a wide-ranging revamp, the opera should sell off all its assets to pay down its current obligations and then allow a brand-new opera to take its place — a move that Cohn's critics say would kill the new organization before it is born.

In the meantime, however, questions have arisen whether the board of directors had a legal right to vote to dissolve the organization in the first place, since California law and the opera's own bylaws seem to suggest that the decision needed to be approved by the entire membership of the opera and not just by the board.

The dissolution filing requirements for nonprofits published by the California Secretary of State's office say that the decision to dissolve a nonprofit should be made by "the vote or written consent of a majority of all the members of the corporation" or a vote of a majority of the board and a majority of members attending an open meeting on the topic. It can only be made by the board of directors if the organization has no members.

The opera's bylaws also suggest that debate over "voluntarily dissolving the association" should be done at a meeting with the members, with appropriate notice stating the general purpose of the meeting. The opera defines members as any person above 18 years of age who is "of good character" and has contributed at a certain sum of money to the opera during the applicable calendar year.

The opera's filings with the IRS define its membes as anyone who contributes more than $50, totaling around 2,400 people as of last June, while in other filings it says that to have a vote, members must contribute $100, which would limit the vote to around 850. There has been no indication that the opera has reached out to its members for a vote or written consent of the dissolution.

Opera management did not respond to queries about the membership requirements, which were revealed by KPBS on Wednesday.

A letter that Cohn wrote later that day did not mention the membership issue, but instead reiterated her view that a shutdown could be imminent. "After several weeks of discussion and debate, the hard, unfortunate financial facts remain before us: San Diego Opera simply might not be financially viable," she wrote.

At least nine directors have quit the board since the vote to dissolve the organization took place March 19, and others have expressed concerns about the opera's insurance coverage for directors' liability. The opera management has not provided directors with any legal advice that they received before calling for the March 19 meeting, which took place with no indication that Cohn would call for the dissolution.

But the opera's closure could be avoided, said Poway businesswoman and board member Carol Lazier. Working with the Opera America consulting group and a select committee of board members, Lazier believes she has found a viable way for the company to continue, which she will present Thursday.

Among her proposals:

• Cheaper office space. The opera's 40-person full-time staff currently occupies 14,777 square feet of office space on the 18th floor of the Civic Center Plaza building at 1300 B St. Under an eight-year lease that expires in June, the opera was making monthly payments starting at $1.70 per square foot and rising to $2.51, with total payments averaging $370,000 per year. Critics of the management team have said the opera could save money by moving to smaller, cheaper office space outside downtown.

• Personnel cuts. The opera has traditionally spent more money on salaries than other organizations its size, especially on the salaries of CEO Ian Campbell, who has averaged more than $640,000 per year over the past four years and his ex-wife, Ann Campbell, who averaged roughly $305,000 for overseeing development and marketing. But salaries were also relatively high for other employees.

The White Knight Committee — made up of opera workers who want to see the company continue — say that even though Campbell and Cohn claim to have seen the financial collapse coming for the past three years, they never asked for concessions from the opera's unions, but instead allowed personnel costs to keep rising.

"Raises were given to the entire staff (during that time)," read a statement issued Wednesday by the committee. "No one, not even department heads, was notified of the severity of the opera's fiscal troubles. Management did not ask departments to cut back, and expenses grew. Neither the employees, nor the donors, nor any of the public was told of the looming financial situation."

• Expanded venues. Lazier proposes going into new venues — ranging from warehouses to outdoor arenas — to attract new operagoers, as well as expanding the music mix beyond Campbell's typical fare, heavily weighted toward standard 19th-century operas. Other operas have found that by expanding the mix, they can attract new donors and subscribers.

Cohn suggests that before making any of these changes, the existing opera should shut down and sell its assets. But White Knight Committee members say that a new organization could not get off the ground without having some of the opera's current assets.

"When the San Diego Opera goes into an empty theater, it must provide everything including lighting instruments, masking drapes, sewing machines, costume gondolas, video monitors, stage management equipment, wig dryers, etc ., before we load in any scenery," said Ron Allen, who oversees production work at the opera.

Without such assets, Allen suggested, it would be difficult for a new opera to survive.

The White Knight Committee will have a public forum in the Copper Room of the San Diego Civic Concourse at 4:30 p.m. on Thursday afternoon to discuss ideas about keeping the opera in business.